The Urban Household Energy Transition

Social and Environmental Impacts in the Developing World

Douglas F. Barnes, Kerry Krutilla, William F. Hyde

• Publisher: Routledge
• Year: 2010
• eBook ISBN: 9781136528156
• Topic: Biological Sciences
• Subtopic: Environmental Management
• Index: Biological Sciences

As cities in developing countries grow and become more prosperous, energy use shifts from fuelwood to fuels like charcoal, kerosene, and coal, and, ultimately, to fuels such as liquid petroleum gas, and electricity. Energy use is not usually considered as a social issue. Yet, as this book demonstrates, the movement away from traditional fuels has a strong socio-economic dimension, as poor people are the last to attain the benefits of using modern energy. The result is that health risks from the continued use of wood fuel fall most heavily on the poor, and indoor pollution from wood stoves has its greatest effect on women and children who cook and spend much more of their time indoors. Barnes, Krutilla, and Hyde provide the first worldwide assessment of the energy transition as it occurs in urban households, drawing upon data collected by the World Bank Energy Sector Management Assistance Programme (ESMAP). From 1984-2000, the program conducted over 25,000 household energy surveys in 45 cities spanning 12 countries and 3 continents. Additionally, GIS mapping software was used to compile a biomass database of vegetation patterns surrounding 34 cities. Using this rich set of geographic, biological, and socioeconomic data, the authors describe problems and policy options associated with each stage in the energy transition. The authors show how the poorest are most vulnerable to changes in energy markets and demonstrate how the collection of biomass fuel contributes to deforestation. Their book serves as an important contribution to development studies, and as a guide for policymakers hoping to encourage sustainable energy markets and an improved quality of life for growing urban populations.

1

Urban Household Energy,
Poverty, and the Environment

Traditionally, the words “developing country” evoked pastoral images of rural villages and small-scale agriculture. Following World War II, the dramatic growth of urban populations added scenes of crowded city streets filled with motor scooters, trucks carrying goods and fuels, and vendors cooking food. By 1980, about 900 million people lived in urban areas in the developing world; today, there are more than 2 billion urban dwellers. Rural population growth rates have leveled off in many developing countries, while urban growth rates now average more than 3.3 percent annually. In some cities, urban growth rates have reached levels of 7 to 8 percent per year (World Bank 1998).

The topic of this book is the relationship between urban growth in developing countries and the decisions of urban households to select and consume different kinds and amounts of residential energy. In the earliest stages of a city’s development, urban dwellers largely consume biomass-based “traditional” fuels. As a city develops and modernizes, the pattern of residential fuel consumption shifts, often to a succession of transition fuels, such as kerosene or coal, and ultimately to the so called “modern fuels”—liquefied petroleum gas (LPG) and electricity. This book assesses the factors that shape this “urban energy transition,” documenting the way in which energy markets in urban areas evolve throughout the developing world. The book also considers the equity, health, and environmental effects of urban energy transitions. Critical to our assessment is the role public policy plays in the welfare of residential energy consumers and in the evolution of urban energy markets.

Why Examine Urban Energy Transitions?

The question can be raised: “Why undertake a study of urban energy transitions in the developing world?” There are several justifications. Developing country governments often invest heavily in infrastructure in the modern fuel sector, and they also frequently implement demand-side policies that affect energy pricing and consumer access. Extensive government involvement in developing country energy markets inherently raises policy issues.

There are also equity issues associated with urban energy transitions. Lower-income residents rely to a larger extent on traditional fuels than do higher-income consumers, and lower-income residents are disproportionately burdened by the costs (both pecuniary and nonmonetary) of residential energy utilization. This segment of the population is most vulnerable to policy changes instituted in energy markets. For these reasons, it is important to assess the distributional burdens associated with urban energy transitions and to consider the intended effects and possible unintended side effects of policies implemented in residential energy markets (Estache et al. 2001, World Bank 1996b).

Finally, negative externalities are associated with urban energy markets. The harvest and utilization of biomass-based fuels can accelerate deforestation and its associated environmental side effects (Wallmo and Jacobson 1998). In addition, the asset value of biomass stocks is not always reflected in harvest decisions when property rights are not well defined, leading to excess extraction (Hartwick 1992). The health consequences of particulates and other emissions from the combustion of traditional fuels is also receiving increasing study in the literature (Kammen 2001; Smith 2002; Smith and Mehta 2003; Smith 1993; Smith et al. 2000). Of particular concern is the exposure risk for women and children—the segment of the population that spends the largest amount of time around cooking fires.

Because of these policy concerns, an extensive body of research has developed on the subject of urban energy transitions. It is fair to say, however, that consensus has not been reached in the field on many important issues. For example, different conclusions have been reached about the factors that drive interfuel substitution and the income switch points at which consumers transition to higher grade fuels. There is also debate in the literature about the impact of energy prices on low-income consumers and the efficacy of different policies for encouraging interfuel substitution. Part of the reason behind this lack of consensus is the fact that conclusions in the literature have generally arisen from extrapolations of results from individual studies of single cities or a few cities (e.g., Adegbulugbe and Akinbami 1995; Alam et al. 1985; Barnes 1990; Bowonder et al. 1987a; Chauvin 1981; de Martino et al. 1991; Dewees 1995; Foley 1987; Hosier 1993; Hymen 1985; Leach 1986; Reddy and Reddy 1984; Sathaye and Meyers 1985; Sathaye and Tyler 1991; Sharma and Ramesh 1986; Tibesar and White 1990).¹ This body of work on urban energy transitions has established a substantial knowledge base about local conditions in study regions, but it has yet to develop a consistent understanding of urban energy transitions as they occur throughout the developing world.

Overview of Research Methods

This book provides a coherent view of urban energy transitions and the associated policy options for intervening in urban energy markets. Our study is based on an integrative analysis of the results of a research program conducted under the auspices of the Energy Sector Management Assistance Program (ESMAP) of the World Bank over the period 1984–2002.² This program financed household energy studies based on interviews with more than 25,000 households in 45 cities as a part of surveys in 12 countries spanning 3 continents. The compilation, standardization, and analysis of this information produced a rich dataset for comparative analysis.

ESMAP originally was formed to deal with the after-effects of the rise in petroleum prices in the early 1980s. The original program financed national energy assessments in many developing countries. As the assessment work progressed, analysis revealed that household and biomass energy comprised the predominant fuel in many developing countries, even though these types of energy were ignored by the majority of the published research. This omission was the case for both rural and urban areas. Due to the varying household energy policies in urban areas, the program began to finance household energy strategies for developing countries, to complement the more general work at the country level. As a consequence, ESMAP began to focus on issues involving the efficient use of biomass fuels, local forest resource management around cities, the rural–urban biomass market chain, urban interfuel substitution, and other policy issues as they related to urban energy. This book is a partial summary of the valuable insights gained during that fertile period of energy research for developing counties.

A significant part of our study estimated periurban forest stocks around a subsample of 34 cities. In many countries, an adequate inventory of standing biomass has never been completed. Consequently, we developed a general methodology for estimating periurban forest stocks from secondary source information, and we used the methodology to generate a standardized dataset. Computerized mapping software was used to digitize site-specific vegetation patterns and to generate biomass density maps. This resource inventory allowed us to connect the conditions in local energy markets to periurban resource regimes and to compare information across our sample on the effect of urbanization on the periurban environment.

We also generated information on selected variables that can affect the availability of biomass fuels, stand degradation, and deforestation around urban areas. These variables included road infrastructure, topography, and precipitation.

In addition to the comparative analysis that forms the largest part of this book, we include a detailed analysis of an ESMAP-sponsored household energy survey of a particular city—Hyderabad India. Results are compared with those of a study of the same city conducted during the period 1981–1982 (Alam et al. 1985b). This longitudinal perspective allows the documentation of the evolution of urban energy choice, fuel consumption, and periurban forest resources over a 10-year period, providing a complementary perspective to the comparative study in other parts of the book.

In summary, the broadly based, synthetic assessment in this book offers a clearer and more comprehensive picture of urban market evolution than previously existed in the literature. It is our hope that this perspective will help guide future research on urban energy transitions and policy formulation in urban energy markets.

Cities and Regions in the Study

The cities included in our study are widely distributed in Africa, Asia, Latin America and the Caribbean, and the Middle East (Table 1-1). They vary significantly along a number of dimensions. Nearly half of the Asian cities in the study had populations greater than one million at the time the household energy surveys were conducted, including such large metropolitan areas as Manila, Bangkok, and Jakarta. On average, the African cities in the study were substantially smaller; only Harare and Lusaka had populations larger than one million. The sizes of other cities in the study tended to range between the largest Asian and smaller African cities.

A number of the cities in the sample are in the early stages of energy transition, marked by relatively high per capita biomass fuel consumption. The consumption shares for biomass fuels (fuelwood and charcoal) are greater than 90 percent for all the cities in Burkina Faso, for example, while at the other extreme, modern fuels provide more than 75 percent of the energy needs in several larger Asian and Latin American cities (e.g., Bangkok, Thailand, and La Paz and Oruro, Bolivia).

Agroclimate and biogeographical conditions also vary widely across the sample. For the most part, the Southeast Asian cities lie in moist, humid tropical regions, with mean annual precipitation levels ranging upward to close to 2,000 mm. The virgin closed-canopy forests of Southeast Asia are among the densest in the world, with biomass ranging up to 345 m³/ha. In contrast, cities in two of the African countries in the study, Botswana and Mauritania, are located in semi-arid and arid regions (the Kalahari desert lies in southern and western Botswana); precipitation levels in Mauritania, the driest area in the study, range from only 35 to 500 mm per year. Open montane woodland and dry bush savannah in Zimbabwe have biomass densities ranging in the neighborhood of 62 m³/ha and 33 m³/ha, respectively. Precipitation levels and natural biomass densities in Haiti and Latin America fall within the levels encountered in Africa and Asia.

TABLE 1-1. Country and City Surveys Analyzed in Urban Household Energy Transition

Region	Country	City
Africa	Botswana^a	Francistown, Gabarone, Selebi-Phikew
	Burkina Faso^b	Ouagadougou, Bobodiougou, Koudougou, Ouahigou
	Cape Verde^c	Mindelo, Praia
	Mauritania^c	Altar, Kaedi, Kiffa, Nouadhibou, Nouakchoot
	Zambia^b	Lusaka, Kitwe, Luanshaya, Livingstone
	Zimbabwe^c	Bulawayo, Harare, Masvingo, Mutare
Asia	India^c	Hyderabad
	Indonesia^c	Bandung, Jakarta, Semarang, Surabaya, Yogyakart
	Philippines^c	Bocolod, Cagayan de Oro, Cebu City, Daveo, Manila
	Thailand^c	Ayuthaya, Chiang Mai, Bangkok
Latin America	Bolivia^c	La Paz, Oruro, Quillacollo, Tarija, Trinidad
and the Caribbean	Haiti^c	Port au Prince
Middle East	Yemen^c	Sanna, Taiz, Hodeida

^a Standing biomass data are available.

^b Urban energy consumption data are available.

^c Both standing biomass and urban energy consumption data are available.

Topography also varies significantly among the study regions. The terrain in Africa is relatively flat: few areas in the study have average slopes greater than 8 percent. In contrast, the regions around the Southeast Asian cities in the study are far more mountainous, with substantial tracts having slopes greater than 8 percent. Topography is also varied in Bolivia: two of the Bolivian cities, La Paz and Oruro, are located in the Andes.

The sample of cities studied encompasses a sufficiently wide range of variation in populations, energy transition stages, biogeographies, and policies to enable generalization about the common factors underlying the evolution of urban fuel markets.

Topics of Study

The transition from traditional to modern fuels is important for urban people because of its potential to improve the quality of energy service, to lower indoor air pollution, and to stem deforestation pressures in periurban environments. This book investigates the socioeconomic and policy factors that shape urban energy transitions and the associated effects on equity, human health, and the environment.

Urban Energy Transitions

It is important to understand the factors influencing the relationship between urbanization, fuel choice, and energy consumption in developing countries, because this understanding provides the informational basis for policy interventions in urban fuel markets. Urban energy transitions are often discussed in the literature as smoothly sequenced evolution from firewood, to charcoal and kerosene, and ultimately to LPG and electricity consumption. In contrast, our study finds that the urban energy transitions are quite varied—in terms of the timing of the transition period and in the transition fuels consumed. It turns out, in fact, that the intermediate stage of the transition follows one of several distinct pathways. It is also the case that the income threshold at which people switch to modern fuels differs widely in different countries, depending on urban-specific household characteristics, resource conditions, and policy regimes. Consumers respond to energy price signals and constraints in urban fuel markets, and governments’ roles in influencing energy prices and access have thereby played a crucial role in urban market evolutions. Biomass supply around cities is another variable that shapes the conditions found in urban energy markets, and it diversifies the expression of the urban energy transition in different cities and countries.

Equity

The poor in urban areas of developing countries face special problems in meeting their basic energy needs. Many of the urban poor are recent migrants from the countryside and continue to rely on traditional fuels they previously collected themselves. Because the opportunity cost of their time is generally low, the urban poor face a new financial burden when they begin paying the urban market price of traditional fuels. A number of inequities in urban energy markets also penalize low-income consumers. In some countries, poorer households pay substantial portions of their incomes for traditional energy, because they have limited access to such alternative fuels as kerosene, LPG, and electricity. Modern fuels, and/or the appliances needed to use them, may not be available in the marketplace due to inc...

Table of contents

• Front Cover
• Title Page
• Copyright
• Dedication
• Contents
• Figures and Tables
• Preface
• About the Authors
• Abbreviations, Acronyms, Energy Conversion Factors, and A Note about Data and Tables
• 1. Urban Household Energy, Poverty, and the Environment
• 2. The Urban Energy Transition
• 3. Household Fuel Choice and Consumption
• 4. Energy and Equity: The Social Impact of Energy Policies
• 5. The Urban Energy Transition and the Environment
• 6. The Energy Transition in Hyderabad, India: A Case Study
• 7. Toward More Effective Urban Energy Policies
• Annex: Methods and Data
• Notes
• References
• Index